Sequestration Does Not Mandate 2% Medicare Advantage Plan Reduction to be Forwarded to Contracted Providers

Monday, May 13, 2013

Sequestration Does Not Mandate 2% Medicare Advantage Plan Reduction to be Forwarded to Contracted Providers

Physical therapists and other health care providers that contract with Medicare Advantage plans should check their agreements to make sure their payments aren't erroneously being cut by 2% as part of sequestration. CMS clarified in a May 1 memo to Medicare Advantage organizations and others that sequestration does not mandate a 2% reduction of reimbursement to Medicare Advantage plan contracted providers. Medicare Advantage plans themselves are subject to the 2% reductions; however, Medicare Advantage plans cannot pass along sequestration cuts to providers unless their contracts with specific providers permit the pass-through. If providers determine that their contracts don't permit these cuts, they should consider challenging the reductions as contrary to their participation and network agreements.

Comments

This just came up on our radar screen with a payer (United Healthcare) for whom we are not contracted with and are considered Out of Network. Should we as well be able to challenge their decision to pass along the 2% reductions?

Posted by Scott Spradling
on 5/14/2013 11:16 AM

Medicare Advantage allows individuals to choose from a wide range of competing plans that may offer richer benefits. http://www.healthcaretownhall.com/?p=6705

Posted by Jeremy Engdahl-Johnson
on 5/15/2013 11:07 AM

Could you please post the link to the memo you're referring to?

Posted by Maggie Dean
on 5/15/2013 1:06 PM

I am not able to find this clarification memo on the CMS website. Will you please post a link so it can be used as 'proof' when appealing claims. thank you.

Posted by Warren Bush -> @IW_D
on 5/17/2013 4:17 PM

I just got a notice from Regence Insurance in Washington state that they are cutting our rates by 2% due to sequestration beginning in September. Please post the link to the CMS memo, so I can refer to it specifically when I speak to the provider relations dept. Thanks

Posted by Melissa
on 5/30/2013 12:55 AM

The memo in question is linked in the story above (see hyperlinked text: "May 1 memo").

Posted by News Now Staff
on 5/30/2013 7:41 AM

Here is a link with a copy of the memo issued to the MAs and PDs dated 05/01/13:
http://www.mha.org/mha/weeklymailing/2013/051313/clarify_sequester.pdf